Sometimes I read something that I find inspiring. This time he came to me as a post on Reddit written by someone called foolish_austrian. The area of expertise and unique insight into how he could develop into the mining / bitcoin mining of the future really captivates me and I think readers will appreciate your contribution in the discussion.
Image by Marko Ahtisaari
So, without further ado, this is stupid:
"As a person with a background in physics and engineering, I am not worried about the possibility of centralization in the field of mining, and it will definitely be distributed.
I mean, I think there will be strong and flowing ups and downs as we pursue Moore's Law. Over the next few years, hardware will depreciate very quickly.
Near 2024 is expected to reach the limit of quantum mechanics, which roughly means we will fix the silicon transistor up to the atomic level. If we make it smaller, they become transparent to matter. (Incidentally, I'm working on a transistor replacement using the electron angle momentum to store data).
As it approaches this limit, mining hardware depreciates in years and not months. When this happens, the dynamics of investment in mining will change substantially. Mining in Greenland on farms with cheap energy and cold climates will actually be more expensive than decentralized alternatives. Actually, mining profits will be negative; mined in Greenland is not possible in its current form.
What mining does is turn electricity into heat, but not in heat ... especially heat between 90 and 120 degrees Celsius, or similar to boiling water. This temperature is not sufficient for most industrial applications, except perhaps for things like water purification. Not used for liquid semiconductor processes, or anything that requires high heat density at least without heat pump.
Then what do you do with a very large capacity to produce heat close to 100 ° C? For the sake of speaking, I would refer to the residents of industrial water heaters, but you can imagine other similar distributed applications for a small amount of heat.
I went to the website and saw Sears energy expenditure and found an average water heater generating about $ 300 / year. According to the US Census there are about 115 million households. This means there is a market of 34,500 million rupiah for heat conversion only in US electricity. Since the temperature of 100 ° C (semiconductor temperature) is very suitable for heating water up to 55 ° C (household use), this is a natural market for Bitcoin mining.
We can also argue that including the limited use and expansion of industry around the world, it can be multiplied by 5 to estimate the global market. It makes the total market convert heat to 200,000 million dollars.
Now the economic argument. In a stable and predictable market (for example, subsequent superexponencial growth), minefield benefits will be castrated by mining costs ... ALWAYS. This means anyone who can "recycle" hot mining can let marginal costs become negative ("mine" losses). The benefits of mining will be negative. Speaking clearly, with Bitcoin mining can generate heat of about $ 200,000 million, and sold to homeowners to heat water.
If the marginal cost of a minefield for anyone who does not recycle heat is a negative thing, the full benefits of mining become negative. As a result, the centralization we see in Greenland and large data centers involves huge costs with no profits that can justify it. Each mining centralization requires efficient heat recovery, which limits the extension of specialized data centers for mining.
One can imagine, then, the power company acting as a mining pool. However, production and distribution are basically industries that are geographically localized (unable to transmit electricity cheaply over long distances). Therefore, the number of power companies is likely to remain much higher than the current number of mining pools. In addition, because nation states are suspicious, most want, if possible, their own power plants. This produces at least 196 natural divisions.
Fortunately, a small amount of heat is needed at any time of the year, in every country, in every home in the world. Going forward, the heat from the data center will be a waste of heat. "
"As a person with a background in physics and engineering, I am not worried about the possibility of centralization in the field of mining, and it will definitely be distributed.
I mean, I think there will be strong and flowing ups and downs as we pursue Moore's Law. Over the next few years, hardware will depreciate very quickly.
Near 2024 is expected to reach the limit of quantum mechanics, which roughly means we will fix the silicon transistor up to the atomic level. If we make it smaller, they become transparent to matter. (Incidentally, I'm working on a transistor replacement using the electron angle momentum to store data).
As it approaches this limit, mining hardware depreciates in years and not months. When this happens, the dynamics of investment in mining will change substantially. Mining in Greenland on farms with cheap energy and cold climates will actually be more expensive than decentralized alternatives. Actually, mining profits will be negative; mined in Greenland is not possible in its current form.
What mining does is turn electricity into heat, but not in heat ... especially heat between 90 and 120 degrees Celsius, or similar to boiling water. This temperature is not sufficient for most industrial applications, except perhaps for things like water purification. Not used for liquid semiconductor processes, or anything that requires high heat density at least without heat pump.
Then what do you do with a very large capacity to produce heat close to 100 ° C? For the sake of speaking, I would refer to the residents of industrial water heaters, but you can imagine other similar distributed applications for a small amount of heat.
I went to the website and saw Sears energy expenditure and found an average water heater generating about $ 300 / year. According to the US Census there are about 115 million households. This means there is a market of 34,500 million rupiah for heat conversion only in US electricity. Since the temperature of 100 ° C (semiconductor temperature) is very suitable for heating water up to 55 ° C (household use), this is a natural market for Bitcoin mining.
We can also argue that including the limited use and expansion of industry around the world, it can be multiplied by 5 to estimate the global market. It makes the total market convert heat to 200,000 million dollars.
Now the economic argument. In a stable and predictable market (for example, subsequent superexponencial growth), minefield benefits will be castrated by mining costs ... ALWAYS. This means anyone who can "recycle" hot mining can let marginal costs become negative ("mine" losses). The benefits of mining will be negative. Speaking clearly, with Bitcoin mining can generate heat of about $ 200,000 million, and sold to homeowners to heat water.
If the marginal cost of a minefield for anyone who does not recycle heat is a negative thing, the full benefits of mining become negative. As a result, the centralization we see in Greenland and large data centers involves huge costs with no profits that can justify it. Each mining centralization requires efficient heat recovery, which limits the extension of specialized data centers for mining.
One can imagine, then, the power company acting as a mining pool. However, production and distribution are basically industries that are geographically localized (unable to transmit electricity cheaply over long distances). Therefore, the number of power companies is likely to remain much higher than the current number of mining pools. In addition, because nation states are suspicious, most want, if possible, their own power plants. This produces at least 196 natural divisions.
Fortunately, a small amount of heat is needed at any time of the year, in every country, in every home in the world. Going forward, the heat from the data center will be a waste of heat. "